• With borders reopening earlier than expected, we raise our FY22E/FY23E earnings forecast for Genting Singapore (SGX:G13) by 163%/123%. Yet, our FY24E earnings are barely changed (-2%) as we doubt gaming operations will recover to 100% of pre-COVID-19 levels.
• We have also introduced an expanded ESG tear sheet for Genting Singapore and assigned it an above average overall score of 80, based on its aggregated quantitative/qualitative/target-based metrics.

South East Asia Has Reopened for Travel…

• As Singapore, Malaysia and Indonesia reopened their borders (Singapore & Malaysia: 1 Apr 2022, Indonesia: 22 Mar 2022) coupled with Singapore axing pre-and post-arrival testing on 26 Apr 2022, 2/3 to 3/4 of Singapore’s FY19A gaming market has returned.
• Our channel checks note a discernible rise in tourists in Singapore since. Thus, we bring forward our forecast that Resorts World Sentosa (RWS)’s VIP volume will recover to 83% of FY19A levels to mid-FY22E from FY24E and RWS’ mass market GGR will recover to 92% of FY19A levels to FY23E from FY24E. These raise our FY22E/FY23E earnings forecast for Genting Singapore by 163%/123%.

… But China Has Changed the Asian Gaming Landscape

• Yet, our FY24E earnings are barely changed (-2%). We doubt Singapore and RWS’ VIP volume will recover to 100% of FY19A levels due to China outlawing cross-border gambling punishable by ≤ 10 years’ imprisonment from Mar 2021.
• We also doubt that Singapore and RWS’ mass market GGR will recover to 100% of FY19A levels as Macanese, Philippine and Cambodian integrated resorts (IR) negatively impacted by the above will try to draw premium mass gamblers that frequent Singapore IRs to compensate (link).

Potential Thai IRs Raises Questions on RWS 2.0

• Moreover, Thailand is mulling legalising IRs (link). We doubt Thailand's IRs will draw away many Malaysia and Indonesia gamblers due to deep personal and commercial ties to Singapore but gather that they will draw away many China HOLD.

Source: Maybank Research - 10 May 2022